McGrath v. Clock Tower Press

The opinion of the court was delivered by: Dora L. Irizarry, U.S. District Judge

MEMORANDUM & ORDER

Before the court is a motion to dismiss for lack of personal jurisdiction, pursuant to Fed. R. Civ. P. 12(b)(2), filed by defendant Clock Tower Press ("Clock Tower"). The Court grants Clock Tower's motion to dismiss for the reasons discussed below.

Background

Pro se plaintiff, Brian McGrath, owns the copyrights to a photograph collection of golfer Ben Hogan. (Compl. at ¶¶ 5-9.) In January 1998, plaintiff granted Sleeping Bear Press ("Sleeping Bear") the right to use the photographs in a book entitled "The Fundamentals of Hogan" ("The Fundamentals") pursuant to a written contract (the "Fundamentals Contract"). (Compl. at ¶ 10; Def.'s Mem. Of Law ("MOL") at 1-2; Def.'s Reply Ex. 2.) On October 23, 2003, Sleeping Bear transferred its rights under the Fundamentals Contract to Defendant Clock Tower. (See Def.'s MOL at 3; Def.'s Reply Ex. 12.)

On June 2005, plaintiff filed the instant action seeking to void the Fundamentals Contract and obtain monetary damages for defendant's alleged failure to pay royalties, failure to "use best efforts to exploit The Fundamentals, breach of the covenant of good faith and fair dealings and fraud. (Compl. at 7-10.) Defendant, a Michigan limited liability corporation, now moves to dismiss this matter pursuant to Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction. (See Def.'s MOL at 2; Gelman Aff. at ¶ 3; Def.'s Reply Ex. 3.) Defendant contends that it has not and does not "do" or "transact" business in New York. (Id.) For the following reasons, the court grants defendants' motion to dismiss for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2).

Discussion

A. The Court Does Not Have General Jurisdiction Over Defendant

In diversity cases, state law governs whether a federal district court has personal jurisdiction over a defendant.*fn1 See Fed. R. Civ. P. 4(k)(1). In New York, "a foreign defendant is amenable to suit in New York if it is engaged in such a continuous and systematic course of doing business here as to warrant a finding of its presence in this jurisdiction." See Realuyo v. Abrille, 93 Fed. Appx. 297, 298 (2d Cir. 2004) (quoting Frummer v. Hilton Hotels Int'l, Inc., 19 N.Y.2d 533, 536, 227 N.E.2d 851, 281 N.Y.S.2d 41 (1967)) (internal quotations omitted). In determining whether a foreign defendant is "doing business," the courts "focus upon factors including: the existence of an office in New York; the solicitation of business in the state; the presence of bank accounts and other property in the state; and the presence of employees of the foreign defendant in the state." Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 58 (2d Cir. 1985) (internal citations omitted). The burden rests on plaintiff to make a prima facie showing that this Court has jurisdiction over the defendant. See Kronisch v. United States, 150 F.3d 112, 130 (2d Cir. 1998). In addition, all factual matters are to be viewed in the light most favorable to the plaintiff. Ball v. Metallurgie Hoboken-Ovepeklt, 902 F.2d 194, 197 (2d Cir. 1990).

Here, defendant Clock Tower was*fn2 a Michigan limited liability corporation. See Def.'s Reply Ex. 3. Defendant also submitted a sworn affidavit of its President and Chief Executive Officer, Charles Gelman, indicating that Clock Tower "does not do business in the State of New York, nor has it ever done business in New York." See Gelman Aff. at ¶ 3. The affidavit states that Clock Tower "ha[d] no offices, agents, employees, subsidiaries, divisions, affiliates, bank accounts, post office box, mailing address or telephone listing in New York, and ha[d] not appointed an agent for service of process in New York," nor does or did it "sell any products or perform any services in New York." See Gelman Aff. at ¶¶ 5, 8. The affidavit further states that Clock Tower "has never owned, leased or purchased any office property or real estate in New York" and that "Clock Tower does not keep any corporate records in New York, nor has it held a board of directors' meeting or shareholders' meeting in New York." See Gelman Aff. at ¶¶ 6, 9. Thus, Clock Tower does not have such continuous and systematic contacts with New York to rise to the level of doing business.

B. The Court Does Not Have Specific Jurisdiction Over the Defendant

New York law provides for personal jurisdiction over a foreign defendant who:

(1) transacts any business within the state or contracts anywhere to supply goods or services in the state; or (2) commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or (3) commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he (i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce; or (4) owns, uses or possesses any real property situated within the state.

N.Y. C.P.L.R. § 302(a). A foreign defendant who satisfies one of the above may be hailed into court in New York if the claims asserted arose from the above New York related acts. See Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 59 (2d Cir. 1985).

In determining whether a defendant "transacts business" within the state, the courts consider the following factors: (1) the defendant has an ongoing relationship with a New York corporation; (2) the contract was negotiated or executed in New York; (3) the contract contains a New York choice of law clause; and (4) payments were to be made into New York or performance was to be supervised from New York. See Agency Rent A Car System, Inc. v. Grand Rent A Car Corp., 98 F.3d 25, 29 (2d Cir. 1996). None of the factors is dispositive; the courts look to the totality of the circumstances. Id. "If, under the totality of the circumstances, a defendant purposefully availed itself of the privilege of conducting business in New York, thereby invoking the benefits and protections of its ...

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